The Beachbody Company(BODI) - 2026 FY - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company has reduced its cash break-even level from $900 million in 2022 to approximately $180 million today, representing a $720 million reduction [24][25] - Free cash flow improved from nearly negative $300 million in 2021 to positive $13.1 million in the first three quarters of 2025, a $300 million improvement [25] - Adjusted EBITDA transitioned from a loss of over $86 million in 2021 to approximately $18 million of positive Adjusted EBITDA in 2025 [26] - The company achieved net income positive of over $3 million in Q3 of 2025 for the first time since going public [26] Business Line Data and Key Metrics Changes - The company has transitioned from a multi-level marketing (MLM) model to a multi-channel strategy, which includes direct-to-consumer, Amazon/Marketplace, affiliates, and retail [14][15] - The restructuring has led to a significant reduction in employee count from over 1,000 to less than 300 [15][22] - The company has maintained eight consecutive quarters of positive adjusted EBITDA, cumulatively around $50 million [17][22] Market Data and Key Metrics Changes - The general wellness market is valued at $6.5 trillion in 2023, with the fitness and nutrition categories each representing a $1.1 trillion potential market [5][6] - The company aims to tap into a broader audience by launching retail products, including a new small serve of Shakeology priced below $40 [21][20] Company Strategy and Development Direction - The company is focusing on an innovation pipeline with new product launches scheduled between 2026 and 2027, including the 10-Minute BODi program and a new P90X program [18][19] - A retail strategy is being implemented to sell previously unretail products, enhancing brand exposure and market reach [13][20] - The company is addressing the non-exerciser demographic with new content and products designed to engage this audience [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the turnaround, stating that the company is a year ahead of schedule and positioned for growth in 2026 and 2027 [24][32] - The financial flexibility gained from the turnaround allows the company to focus on innovation and creative product development rather than financial survival [22][32] Other Important Information - The company has restructured its debt, reducing overall interest expenses by 44% [15][22] - The average interest rate on debt is approximately 15.5%, with a cash position of $34 million against $25 million of debt [28] Q&A Session Summary Question: Has the retail rollout process changed? - The retail process is slower than anticipated due to planogram schedules, but the company is actively engaging with retailers and aggregating responses [34] Question: What could the long-term margin structure look like on an EBITDA level? - Management indicated that gross margins should normalize in the low- to mid-70s, with potential for high 80s to 90% on fitness and mid-40s to 50% in nutrition as the company grows [36][37] Question: What online media has been most effective for the target demographic? - The company has not yet identified the best medium but acknowledges the need to tailor content for different platforms, noting that audiences over 30 are less engaged with TikTok [38]